IRS scandal throws wrench into tax reform

Controversy seen slowing efforts to revise the code

May 19, 2013 @ 12:01 am

By Darla Mercado

Financial advisers can expect few changes in the tax law for the foreseeable future, thanks in part to the recent revelation that the Internal Revenue Service targeted conservative not-for-profit groups.

Although bitter feelings already exist across party lines, Ann L. Combs, principal and head of government relations at The Vanguard Group Inc., thinks that the scandal surrounding the IRS' treatment of Tea Party affiliates will sharpen that divide.

“The IRS situation that's unfolding now will make tax reform harder,” she told an audience at InvestmentNews' Retirement In-come Summit in Chicago last week. “It'll be hard to talk about tax reform, as everyone will be attacking the agency that administers the code.”


Despite the impasse, Ms. Combs thinks that some progress will be made in getting legislators to commit to the intention of tax reform, though actual changes are a long way off.

There was optimism this month that with House Ways and Means Committee Chairman Dave Camp, R-Mich., and Senate Finance Committee Chairman Max Baucus, D-Mont., would commit to a bipartisan overhaul of the tax code.

“This controversy sucks a lot of oxygen out of the room and distracts from tax reform,” said Steve Rosenthal, a visiting fellow at the Tax Policy Center.

“There is also the harm to a spirit of cooperation and collegiality,” he said. “Tax reform can only happen in coordination with the legislative and executive branches, and Democrats and Republicans.”


What do you think?

View comments

Recommended for you

Featured video


Why advisers are pessimistic about the economy

Deputy editor Bob Hordt and senior research analyst Matt Sirinides discuss a recent InvestmentNews survey of advisers, most of whom see a recession ahead before the next presidential election.

Recommended Video

Keys to a successful deal

Latest news & opinion

Blackrock exposed data on 12,000 financial advisers

The data appeared in three spreadsheets, linked on one of the New York-based company's web pages dedicated to its iShares exchange-traded funds

Advisers throw cold water on FIRE movement

Millennials love it, advisers don't: Turns out, extreme early retirement is a suitable goal for almost nobody.

10 universities with the most billionaire alumni

These 10 American schools have the greatest number of alumni who are billionaires.

Top-performing ETFs of 2018

The markets took a beating last year, but these exchange-traded funds bucked the trend

Morningstar says investors rushed the exits in 2018

Net flows into mutual funds and ETFs were the lowest since the 2008 financial crisis, while money-market funds captured inflows.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print